How Can Insurance Dictate Your Medication?

One of the common features of insurance plans, including Medicare, is to standardize the prescription medicines available to members. This is generally done in four ways: prior approval, maximum limits in dispensing, step protocol and prohibiting certain medicines.

Prior Approval

• Prior protocol is also referred to as prior authorization and requires a health-care provider to gain authorization to prescribe a particular medication.

Step Protocol

• Step protocol, which is also called step therapy, is used to control costs and also to minimize risks. Step protocol is practiced at the onset of a drug therapy recommended for a medical condition, utilizing the safest and most cost-effective drug regimen, then progressing to more costly therapy that may also involve more risks only when necessary. Second- or third-line therapies are only covered following a trial of first-line medications.

Maximum Dispensing Limit

• According to Humana, a health insurance company, maximum dispensing limits are based on product information approved by the Federal Drug Administration and on recommendations of drug manufacturers. These dispensing limits are reviewed and approved by your insurance provider, and they create a threshold on the quantity of medication you can receive from a pharmacy at any single time.

Prescription Drug List (PDL)

• A PDL is a list created by your insurance carrier every year that categorizes and dictates the medications that fall under your insurance plan. The list may change during the coverage year depending on the policy guidelines of your insurance provider.

Significance

• Insurance companies state that the price of a drug drops to a range of 30% to 80 % once its patent expires and becomes available in a generic form. Step protocol, prior approval and Prescription Drug List are methods to control the costs of health care, while maximum dispensing limits are put in place as a protective measure.